The financial future of one of the world's most prestigious opera houses, La Scala in Milan, lies in the balance.

La Scala cancelled a performance of The Barber of Seville during a strike

La Scala was expensively rebuilt and refurbished only a year ago.

The cash-strapped Italian government has threatened to slash by a third from next year the heavy subsidy which keeps the theatre in business.

Across the board cuts in next year's budget for the arts are also likely to affect the Venice Film Festival and the newly opened Music Auditorium in Rome.

Other Italian cultural icons which may be touched are 12 other major opera houses, including the Fenice in Venice, plus theatres in Florence, Rome, Naples and Palermo.

La Scala has been in the eye of a storm for months, buffeted by operatic management tantrums, resignations, threats of legal action and strikes.

World-famous conductor Riccardo Muti stepped down as musical director earlier this year, after a very public row with La Scala's orchestra and former management over pop programming aimed at attracting new, younger audiences.

I don't want to be remembered as the man who has shut down La Scala in Milan

Rocco ButtiglioneItalian Culture Minister

The new French director of La Scala took on the daunting challenge of putting the house in order exactly six months ago.

Stephane Lissner is almost a cultural icon himself in his own country and has been running the Aix-en-Provence music festival for years, as well as the Vienna Opera Festival.

In Milan on Friday, he gave his first public news conference since his appointment - an upbeat report, in rather hesitant Italian.

He spoke of his attempt to restore order and morale among the musicians, chorus members, ballet dancers and other staff who have been manifesting their displeasure at the former management by holding sporadic strikes.

Mr Lissner faced the press in the sparkling new gilt and white painted foyer that leads into the red plush stalls. At the end journalists gave him the sort of ovation usually reserved for opera stars.

Solution hopes

The new La Scala boss said the theatre was not in debt, as he sat below a bronze bust twice the real size of opera composer Giacomo Puccini.

Arts workers have been protesting at the cuts

But he admitted that the subsidy the theatre receives from the government has steadily declined by 38% over the past 20 years, while expenses continue to mount each year.

He said it was no longer true that La Scala got the lion's share of the government fund for the performing arts, which has to be shared out among all 13 of Italy's opera houses - not to mention the crisis-ridden film industry and the nation's main orchestras.

I asked him for the latest news on the cash situation.

"I am sure we shall reach a solution," he said.

"I am not here in Milan to resign, but to work. I may need five years, but I am sure we will have a wonderful theatre."

"Opera houses in France and Germany are more heavily subsidised than in Italy - it is not true that we are overstaffed and badly managed."

Prime Minister Silvio Berlusconi caused a furore last month by claiming that La Scala had 1,000 full-time employees and could easily sack half of them.

"Not true," Mr Lissner said.

"The exact figure is 745, and salaries and fixed expenses account for 58% of total costs, while our two opera houses in Paris employ 1,584 full-time staff and pay out 70% of their income on salaries and wages."

Resignation threat

Back in Rome, Italian Culture Minister Rocco Buttiglione confirmed that he had threatened to resign unless the planned cuts in next year's budget for the performing arts were "abandoned".

"I don't want to be remembered as the man who has shut down La Scala in Milan," he said.

"We have to restructure our main opera houses. If we cut their finances, we will just destroy one of the main elements of our cultural heritage.

"I am confident that Prime Minister Berlusconi will listen to my arguments and preserve the high quality of our operatic repertoire."